Answers

The city was earlier called Bombay. The name was changed by an act of
the Indian parliament in 1997. The reason for this change was that in
two of the local languages, Marathi and Gujarati, the city has long
been called Mumbai. It is believed that the name comes from the name
of one of the old Koli goddesses, Mumba Devi, a temple to whom now stands
in Bhuleshwar.

By a historical accident.
There was no city on these seven
islands before the 18th century. The nearest
city was Thane. It has
a long history and was mentioned by many travellers, including Ibn Batuta. The
seven islands held many
villages with different names, some of which survive in the names of
areas in the city: Girgaum
and Worli to name just two. The
British established a port settlement near the harbour in the late 17th
century. This eventually grew and engulfed all the other villages. The
name Bombay may have got attached to the British settlement as an English corruption
of the Portuguese description of the harbour, "Bom Bahia",
meaning good bay.

That's not hard. If the city didn't have a name already, I would have
called it "Pydhonie" (meaning foot wash), after
a crowded corner of south Mumbai. That place name comes from a
long lost creek which allowed tidal waters to wash into a dusty square
where no tide has been in the last couple of centuries. But I think it is
an apt name for a city which has historically called to wanderers to
settle down and do business: the British, the Gujaratis (including the
Parsis and the Bohras) and Marwaris, the Iranis, Baghdadi Jews and Armenians, the
Tamils, Malayalees and Konkanis, and more recently the Biharis,
UP-wallahs and Bengalis.

The erstwhile Victoria Terminus, the construction of which started in 1878, and
finished in 1888, a year behind schedule, was meant to commemorate the Jubilee.
It has been renamed the Chhatrapati Shivaji Terminus. Read more about it
here.